Bajaj Auto reports 11.3% Net Income decline while 7.0% Revenue growth
21-05-2015 • About Bajaj Auto (
$BAJAJ-AUTO) • By InTwits
Bajaj Auto reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bajaj Auto has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 1.9%.
- CAPEX is quite volatile: 2,697 in FY2015, 2,201 in FY2014, 5,083 in FY2013, 3,614 in FY2012, 2,017 in FY2011
- The company has highly profitable business model: ROIC is at 35.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bajaj Auto ($BAJAJ-AUTO) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 159,274 | 189,455 | 195,335 | 197,263 | 211,062 | 7.0% |
| EBITDA | 31,585 | 37,100 | 36,457 | 41,552 | 41,132 | -1.0% |
| Net Income | 34,549 | 30,486 | 31,441 | 34,107 | 30,256 | -11.3% |
Balance Sheet
|
|---|
| Cash | 2,475 | 11,848 | 5,665 | 5,009 | 5,927 | 18.3% |
| Short Term Debt | 1,801 | 254 | 271 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 2,017 | 3,614 | 5,083 | 2,201 | 2,697 | 22.5% |
Ratios
|
|---|
| Revenue growth | -48.6% | 18.9% | 3.1% | 1.0% | 7.0% | |
| EBITDA growth | 23.2% | 17.5% | -1.7% | 14.0% | -1.0% | |
| EBITDA Margin | 19.8% | 19.6% | 18.7% | 21.1% | 19.5% | -1.6% |
| Net Income Margin | 21.7% | 16.1% | 16.1% | 17.3% | 14.3% | -3.0% |
| CAPEX, % of revenue | 1.3% | 1.9% | 2.6% | 1.1% | 1.3% | 0.2% |
| ROIC | 78.7% | 64.1% | 48.7% | 42.8% | 35.5% | -7.4% |
| ROE | 91.8% | 55.9% | 44.3% | 37.1% | 28.5% | -8.6% |
| Net Debt/EBITDA | -0.0x | -0.3x | -0.1x | -0.1x | -0.1x | -0.0x |
Revenue and profitability
Bajaj Auto's Revenue increased on 7.0% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 21.1% to 19.5% in FY2015.
Net Income marign decreased on 3.0 pp from 17.3% to 14.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Bajaj Auto's CAPEX/Revenue was 1.3% in FY2015. CAPEX/Revenue decreased slightly on 0.63 pp from 1.9% in FY2012 to 1.3% in FY2015. It's average level of CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at high and attractive ROIC (35.46%) and ROE (28.46%). ROIC decreased on 7.4 pp from 42.8% to 35.5% in FY2015. ROE decreased on 8.6 pp from 37.1% to 28.5% in FY2015.
Leverage (Debt)
The company has no debt. Cash jumped on 18.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 16.0x and P/E 22.0x while industy averages are 10.5x and 26.1x. Bajaj Auto's EV/(EBITDA-CAPEX) is 17.1x with the industry average at 4.7x.
Appendix 1: Peers in 2/3 Wheelers
Below you can find Bajaj Auto benchmarking vs. other companies in 2/3 Wheelers industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tvs Motor Company ($TVSMOTOR) | | 13.6% | 1.0% | 11.6% | 22.3% |
| Scooters India ($SCOOTER) | | 30.0% | -8.8% | -7.8% | -13.1% |
| |
|---|
| Median (2 companies) | | 21.8% | -3.9% | 1.9% | 4.6% |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | | 18.9% | 3.1% | 1.0% | 7.0% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tvs Motor Company ($TVSMOTOR) | 5.3% | 6.6% | 7.1% | 5.9% | 5.9% |
| Scooters India ($SCOOTER) | -4.2% | -1.6% | -3.4% | 1.0% | 4.7% |
| |
|---|
| Median (2 companies) | 0.5% | 2.5% | 1.8% | 3.5% | 5.3% |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 19.8% | 19.6% | 18.7% | 21.1% | 19.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tvs Motor Company ($TVSMOTOR) | 4.4% | 6.3% | 2.2% | 3.4% | 3.7% |
| Scooters India ($SCOOTER) | 0.9% | 0.3% | 0.2% | | 0.6% |
| |
|---|
| Median (2 companies) | 2.7% | 3.3% | 1.2% | 3.4% | 2.1% |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 1.3% | 1.9% | 2.6% | 1.1% | 1.3% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tvs Motor Company ($TVSMOTOR) | 13.2% | 17.2% | 17.4% | 16.8% | 18.4% |
| Scooters India ($SCOOTER) | -61.3% | | -654.7% | 0.9% | |
| Kinetic Engineering ($KINETICENG) | | -8.1% | -14.9% | | |
| |
|---|
| Median (3 companies) | -24.1% | 4.5% | -14.9% | 8.8% | 18.4% |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 78.7% | 64.1% | 48.7% | 42.8% | 35.5% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tvs Motor Company ($TVSMOTOR) | 3.0x | 2.0x | 1.9x | 1.3x | 1.8x |
| Scooters India ($SCOOTER) | | | | -26.5x | 0.0x |
| |
|---|
| Median (2 companies) | 81.8x | 2.0x | 1.9x | -12.6x | 0.9x |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | -0.0x | -0.3x | -0.1x | -0.1x | -0.1x |
